* Cuts book value of Steel Americas to 3.4 bln euros
* Q2 net loss 656 mln euros vs poll avg 25.5 mln profit
* Q2 adj EBIT 241 mln euros vs Reuters poll avg 200 mln
* Cuts sales outlook, affirms operating profit target
* Shares gain 4 pct on hopes of Steel Americas sale
(Adds analysts, shares, detail, background)
By Maria Sheahan
FRANKFURT, May 15 German steelmaker ThyssenKrupp
took another writedown on the value its Steel Americas
business, driving it to an unexpected quarterly loss but raising
hopes it is closer to selling the troubled asset.
The firm said on Wednesday it was cutting the book value of
Steel Americas, which comprises a mill in Brazil and another in
the United States, to 3.4 billion euros ($4.4 billion) from 3.9
billion, which analysts said showed it was ready to accept a
lower price and could be nearing a long-anticipated deal.
"The precise figure of 683 million euros (for the writedown)
indicates that the deal is imminent," analyst Heino Ruland of
Ruland Research said.
At 0820 GMT, ThyssenKrupp shares were up 4 percent at 15.715
euros, among the biggest rises by a European blue-chip stock
Steel Americas has been a thorn in ThyssenKrupp's side for
years, as the project cost more than expected to set up and then
racked up losses as steel prices and demand were weakened by a
faltering global economy.
Sources familiar with the matter have told Reuters that
ThyssenKrupp was in talks with Brazilian steelmaker CSN
, as well as a consortium of ArcelorMittal,
the world's biggest steelmaker, and Japan's Nippon Steel
over a potential sale of Steel Americas.
Both sets of bidders have offered more than $3 billion, but
less than the book value at the time. U.S. Steel and Nucor
have put in bids just for the U.S. mill, the sources
A sale of Steel Americas at even the lowered book value
would be a "great result", Davy analyst Tim Cahill said, "given
that the market is factoring in 2.0-2.5 billion euros".
ThyssenKrupp Chief Executive Heinrich Hiesinger has been
trying to offload the mills as he shifts investments to
higher-margin products and services, such as elevators,
submarines and parts for manufacturing plants.
The writedown pushed ThyssenKrupp to an unexpected net loss
of 656 million euros for the fiscal second quarter through the
end of March. Analysts had on average expected a profit of 25.5
Even excluding Steel Americas and other units up for sale,
ThyssenKrupp remained in the red, posting a net loss that
narrowed to 89 million from 164 million euros.
The operating margin of its continuing businesses shrank to
zero from 3 percent a year earlier on a slump in steel prices,
weak demand for car and wind turbine components and provisions
it set aside to cover fines and claims related to a rail cartel.
ThyssenKrupp is nearing the end of a push to sell assets
with a total of 10 billion euros in annual revenue, and is also
cutting costs and changing management structures in an attempt
to return the company to growth and pay down debt.
It said on Wednesday that it would cut 3,000 of 15,000
administrative jobs as part of its savings plan.
But CEO Hiesinger still faces an uphill battle as the global
economy remains weak and after a series of setbacks and scandals
caused him to axe half his management board late last year.
ThyssenKrupp warned on Wednesday it no longer expected sales
to remain stable at about 40 billion euros in its fiscal year
ending in September, following an 11 percent drop in quarterly
revenue from continuing businesses.
It still expects adjusted operating profit from those
businesses to decline to about 1 billion euros from 1.4 billion.
ArcelorMittal posted a smaller-than-expected 26 percent drop
in first-quarter core earnings last week, cushioned by cost
($1 = 0.7705 euros)
(Additional reporting by Hakan Ersen; Editing by Harro ten
Wolde and Mark Potter)